8 Sep 2016 07:00
8 September 2016
Victoria Oil & Gas Plc
("VOG" or "the Company")
Victoria Oil & Gas Plc
("VOG" or "the Company")
Reserve Bonus and 1.2% Contingent Payment Agreements Extinguished
Victoria Oil & Gas today is pleased to announce that its wholly owned subsidiary Gaz du Cameroun S.A, a BVI company ("GdC") has entered into a confidential settlement that resolves all outstanding issues concerning the previously disclosed Reserve Bonus Payment Agreement ("Reserve Bonus") and a 1.2% royalty due pursuant to the Contingent Payment Agreement ("CPA") agreed prior to VOG's involvement with the Logbaba Gas Project ("Settlement").
As previously reported in the Report and Accounts to 31 December 2015, GdC was in arbitration over the timing and quantum of the Reserve Bonus. The Company is pleased to announce that during a formal mediation process with its counterpart GdC agreed not only a global Settlement, including all claims in arbitration and termination of the Reserve Bonus, but also took the opportunity to negotiate termination of the CPA. The commercial terms are subject to a confidentiality undertaking, but are not materially different from the combined provision and contingency announced in the Report and Accounts to 31 December 2015.
Commenting today Ahmet Dik, CEO of VOG, said; "We are very pleased with the Settlement, which draws to a conclusion an area of uncertainty within the business, without putting undue pressure on the Group's financial resources. The termination of the CPA as part of the Settlement is a significant benefit to shareholders in terms of future profitability. The Board and I continue to look for areas to take costs out of the business and improve returns for shareholders."
This Regulatory News Announcement contains inside information.
For further information, please visit www.victoriaoilandgas.com or contact:
Victoria Oil & Gas Plc
Kevin Foo / Laurence Read Tel: +44 (0) 20 7921 8820
Strand Hanson Limited (NOMAD)
Stuart Faulkner / Rory Murphy Tel: +44 (0) 20 7409 3494
Shore Capital Stockbrokers Limited (Joint Broker)
Mark Percy / Toby Gibbs (corporate finance) Tel: +44 (0) 207 408 4090
Jerry Keen (corporate broking)
FirstEnergy Capital LLP (Joint Broker)
Jonathan Wright/David van Erp Tel: +44 (0) 207 448 0200
Bell Pottinger
Daniel Thöle / Charles Stewart / Zara de Belder Tel: +44 (0) 20 3772 2499
Notes to Editors
About Victoria Oil & Gas Plc
Victoria Oil & Gas (VOG.L) is a gas utility company.
The Company's subsidiary, Gaz du Cameroun S.A. ("GDC") owns a 60% participating interest and operates the onshore Logbaba Gas Project. The Logbaba Gas Project supplies cost effective, clean and reliable natural gas to industries in the Douala region of Cameroon. RSM Production Corporation, an affiliate of Grynberg Petroleum Company of Denver, Colorado holds the remaining 40% participating interest. In addition, VOG has recently been assigned a 75% participating interest in the Matanda block, which neighbours the Logbaba block. The remaining 25% participating interest is held by AFEX.
VOG also holds 100% of the West Medvezhye oil and gas exploration project near Nadym, Russia. Given the challenging economic environment in Russia, The Group has fully impaired the West Medvezhye assets.